By Jack Hipple
It is amazing to watch the pendulum of innovation swing back and forth about every 15-20 years. Back in the early 1980s, there was a surge of interest in innovation as many large corporations, faced with slowing profit growth, recognized that something had to change in order for them to succeed long-term. At Dow Chemical (Dow) in 1981, a "discovery research" function and responsibility was established. Its leaders were given 15 percent of other departments' budgets; in order to get it back the line managers had to go to the discovery research manager with projects that had a horizon of more than six months, took the company into a new business area, used some outside technology, etc.
Along with these internal efforts, Dow made major acquisitions involving billions of dollars in energy resources, pharmaceuticals, biotechnology, agricultural chemicals and consumer products. Some interesting new businesses derived from these internal activities, such as the beginnings of linear low density polyethylene (LLDPE) and Citrucel™ OTC laxative.
Ten years later, all the acquisitions and new business ventures, with the exception of agricultural chemicals, were gone as announcements were made about getting back to the "core" businesses – the low-cost manufacturing of commodity chemicals. Dow was one of the early adopters of Six Sigma as part of this move. Other companies in this early '80s time frame took slightly different approaches, but they all involved a special position, with or without money, charged with stimulating the organization in some form or another. Special internal "idea" rooms were created. (Most of these are now computer storage facilities.)
In July 2008, the president of Dow, in announcing the acquisition of Rohm and Haas, said that he had to change the fact that 70 percent of the current global businesses were commodities. Reading that article is like a real-life version of the movie "Groundhog Day." How many billions of dollars have flowed back and forth, with thousands of people moving in and out as the cycle repeats itself? If another decade or so, this cycle will repeat.
Customer Wants or Needs
An IBM ad suggests that businesses only invest in what customers want – not what they need. This either/or has to stop; both are needed in an effective innovation effort.
Teflon™, and its millions of dollars of profits in the past decades, was not discovered through a market research effort asking people about food sticking to frying pans. It was discovered – accidentally – by a bench researcher who noticed that there was no pressure in a gas cylinder that supposedly contained a fluorocarbon gas. It was one of three cylinders; if the researcher had not looked at that cylinder, the world might still be searching for a compound that is virtually chemically inert, temperature resistant to 450 degrees, a part of nearly every piece of household cookware sold and a key component of high temperature, corrosion resistant piping systems.
The famous Post It™ story is more widely known; 3M had told its researchers to discard any adhesive formulation that did not have strong adhesion. Without a culture to support curiosity in the mind of a choir singer who got tired of page markers falling out of his church hymnal, this great product would not have been developed. Even after this invention was recognized, it almost did not make it until the market research folks gave samples to secretaries instead of the managers who asked, "What do we need these things for?"
Two other "accidental" innovations feature Viagra™ and Rogaine™ – the combination of which have more than a billion dollars in sales every year. Merck was not trying to develop an erectile dysfunction drug – it was evaluating a drug to stimulate blood flow. A group of men, using the drug during its clinical trial, casually said to the doctor running the trial, "I don't know about my heart, but let me tell you about something else…" Fortunately Merck had an "inside-out" person listening and paying attention, and the rest is history – profits in the form of Viagra™ sales. And then there's Rogaine™. A lab technician got some of the chemical compound on his arm and soon sprouted hair all over the place. Again, someone was listening and paying attention – there is now another over-the-counter drug, whose major application was discovered through the combination of accident and acute attention.
On the other hand, there are an equal number of successes by looking outside in. Consider Southwest Airlines. When the airline started, business experts asked why they were undercutting fares by 50 percent when 20 percent would get everyone's attention. The response then, as it still is today, is that Southwest is trying to get people out of cars and using alternative methods of getting from point A to point B. How many people still fly Southwest Airlines because the first two bags are free, no seat prices are imposed and the total fare savings can be as much as $100?
Function and Attention
IBM is wrong to suggest only innovating one way – both curiosity about the marketplace as well as in the minds of researchers, market researchers, sales people, production managers and technical staff to observe unusual things, ask questions and question possibilities.
The keywords to tie together inside-out and outside-in views are function and attention. What are all the possible functions of a film? What could be changed about the chemistry of the polymer system to improve its functionality? If a drug stimulates blood flow, what applications might that have? If hair grows on an arm, where else is hair growing a possible opportunity? A plastic film technical service person observed that American Airlines was using film to apply their "AA" logos on to planes while traveling. Films are used to wrap things, aren't they? The fact that they could substitute for paint had never occurred to anyone.
When meeting with potential customers, it is necessary to observe and pay attention to the functions of products within their systems. Company X is a raw material supplier to Company Y; is Company Y supplying glue or is it adhering one thing to another? Why is this being done? The important question is, "How else could it be done?"
If there is another way that does not involve Company X's raw materials, the business may be out of business. If Company X, on the other hand, understands the possibilities, it may present an entire new business opportunity involving application patents, collaborative relationships or acquisitions. If the research is internal, employees should be thinking about the function that the current materials or systems are performing and ask where else, outside of the current business, this function is of potential value? This will take some outside prodding. What other function could this product or system replace or simplify? When working in the lab, pay attention! Despite centuries of research and knowledge, people are still surprised by things once in a while. The trick is to encourage staff to have their eyes open and observe. Maybe something unexpected is occurring and maybe that unexpected behavior has a useful function.
When economic conditions change, there needs to be some oscillation between the degrees of emphasis between "have" and "need," but either spigot can be turned off totally or a company runs the risk of being sandbagged by someone else who had both eyes open. Think attention and function at all times, regardless of the business situation.
About the Author:
Jack Hipple is a principal with Innovation-TRIZ. He is the TRIZ instructor for AIChE/ASME and does TRIZ workshops for ASQ, PDMA and the Human Factors and Ergonomics Society. He has written TRIZ articles for The TRIZ Journal, Quality World, Mechanical Engineering, World Futures Quarterly, Creativity and Innovation Management's inaugural TRIZ issue, as well as a special three-part series on TRIZ for Chemical Engineering Progress. Contact Jack Hipple at jwhinnovator (at) eartlink.net or visit http://www.Innovation-TRIZ.com.
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